Comcast sues Vermont to avoid building new cable lines

Comcast has sued the state of Vermont to try to avoid a requirement to build 550 miles of new cable lines.

Comcast’s lawsuit against the Vermont Public Utility Commission (VPUC) was filed Monday in US District Court in Vermont and challenges several provisions in the cable company’s new 11-year permit to offer services in the state. One of the conditions in the permit says that “Comcast shall construct no less than 550 miles of line extensions into un-cabled areas during the [11-year] term.”

Comcast would rather not do that. The company’s court complaint says that Vermont is exceeding its authority under the federal Cable Act while also violating state law and Comcast’s constitutional rights:

The VPUC claimed that it could impose the blanket 550-mile line extension mandate on Comcast because it is the “largest” cable operator in Vermont and can afford it. These discriminatory conditions contravene federal and state law, amount to undue speaker-based burdens on Comcast’s protected speech under the First Amendment of the United States Constitution… and deprive Comcast and its subscribers of the benefits of Vermont law enjoyed by other cable operators and their subscribers without a just and rational basis, in violation of the Common Benefits Clause of the Vermont Constitution.

Rival providers Charter and Burlington Telecom don’t have to comply with these special requirements, Comcast said. Instead, the other companies “need only comply with the non-discriminatory line extension policies” established in a VPUC rule.

Comcast’s complaint also objected to several other requirements in the permit, including “unreasonable demands” for upgrades to local public, educational, and governmental (PEG) access channels and the building of “institutional networks (“I-Nets”) to local governmental and educational entities upon request and on non-market based terms.”

The requirements will raise prices for Comcast customers, the company argues. “Together, these contested conditions would impose tens of millions of dollars in additional regulatory costs and burdens on Comcast and its Vermont cable subscribers,” Comcast wrote.

Comcast often refuses to extend its network to customers outside its existing service area unless the customers pay for Comcast’s construction costs, which can be tens of thousands of dollars.

Vermont defends cable expansion requirement

Comcast previously asked the VPUC to reconsider the conditions, but the agency denied the request. (Vermont Public Radio posted the documents that we’ve linked to and published a story on the lawsuit yesterday.)

Comcast entered Vermont by purchasing Adelphia in 2005, despite already being aware of state procedures that ascribe great importance “to building out cable networks to unserved areas to meet community needs,” the VPUC’s denial said.

“However, Comcast presented no evidence in this proceeding that previously identified community needs and interests for cable line extensions to unserved areas were no longer as important as in the past or could be adequately met through compliance with [VPUC’s line extension rule],” the denial said. “Based on the evidence, the Commission found that the… line extension requirements were supported by the needs and interests of the state to expand the availability of service in unserved areas of Vermont.”

The commission determined that the 550-mile buildout “will not impair Comcast’s ability to continue to earn a fair and reasonable return on its investments.” The commission considered factors “includ[ing] the historic rate of line extensions in the service area, prior construction budgets for line extensions, and the profitability of Comcast’s cable operations in Vermont currently and while it was completing significant line extensions in Vermont [in previous years].”